Trump facing lawsuit over misleading investors News
Trump facing lawsuit over misleading investors

Four individuals filed a lawsuit in the Southern District of New York District Court on Monday against Trump Corporation and Donald Trump alleging violations of the Racketeering Influenced and Corruption Organizations (RICO) Act. The lawsuit also names Donald Trump Jr., Eric Trump, and Ivanka Trump as defendants.

The lawsuit alleges that the defendants made false and misleading statements that encouraged individuals to invest in a multi-level marketing company named American Communications Network (ACN) while being paid by ACN to make the statements. Trump is accused of misrepresenting the risk profile of ACN, stating that ACN was a low-risk business venture. The lawsuit states that Montana investors only receiving an average compensation of $53.25 in compensation after an average of $752.60 of payments to ACN.

Trump is also accused of misleading investors by falsely claiming the viability of the ACN business model. The lawsuit sites a French Directorate General for Competition Policy, Consumer Affairs, and Fraud Control report that stated only 1 percent of ACN recruits would see a satisfactory income. The lawsuit then accuses Trump of misrepresenting the viability of the ACN products, specifically concerning a video-phone marketed by the company. The lawsuit states that there is “no reason to expect consumers would demand the phone, and nothing to suggest a standalone videophone was a desirable product in light of its competition.”

The plaintiffs, identified in the lawsuit as Jane Doe, Luke Loe, Richard Roe and Mary Moe, all paid to participate in ACN events and bought training and promotional materials between 2013 and 2017. The plaintiffs allege that they all participated in ACN because of Trump Enterprise’s endorsement of ACN.

The lawsuit also seeks actual and punitive damages. The lawsuit is also seeking class action status and enjoining the defendants from making false marketing and advertisement statements.

President Donald Trump has faced a series of lawsuits in recent years. In September the US Court of Appeals for the Sixth Circuit dismissed part of a lawsuit accusing Trump of inciting a riot. In October a lawsuit was filed against Trump accusing him of freedom of the press violations.